Two focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. There are numerous important aspects to running a business beside the revenue generation. You can give your chance the best prospects for succeeding by paying attention to them. The following contributed post is entitled, Focusing On Financial Viability To Support Longevity.
Improving the financial viability of your company is vital to help you survive a range of economic factors including, but not limited to, inflation, changes in consumer demands, political unrest, wars and the threat of cybercrime, to name a few. Businesses that can prepare for the future and account for any changes and fluctuations in the landscape can support growth and longevity; however, this isn’t possible without first securing your financial viability and ensuring that you are well-placed to withstand anything thrown in your direction.
Accounting
Staying on top of your accounts is vital. Every business owner knows this. Poor cash flow and accounting are leading causes of business failure.
Daily records of transactions, incomings and outgoings will help you to see where you are right now. At the same time, accounting diligence can give you a more comprehensive oversight of your financial position, potential risks, and compliance, amongst other things. This is all vital information to help you make the best financial decisions going forward.
Improving Branding
To make your business future-proof, you need to offer something no one in the market is or a better quality of service or product than your competitors. Strategically increasing prices in line with quality standards can help you to focus on improved branding and reputation, thus cementing your standing in your industry. While raising prices can be a risk, it is a calculated one that can pay off if you have the standards to back up the cost increase.
Manage Debt
Debt can be useful in helping the business achieve its goals, expand, and develop what they do. However, too much debt can be damaging. Check if you can pay off your debts sooner rather than later or refinance what you owe to get better rates so you can preserve your cash flow for the business without putting it all at risk.
Manage Assets
You need to monitor the assets you own, their value, and their depreciation rates. Do you know how much cash is held in your assets? You must also know how quickly they are turned into liquid assets to support cash flow if required. Once you know this, you can determine if you need to hold onto them or sell them and invest in newer models and equipment.
Prioritise Cash Flow
Earlier in this post, it was touched upon about staying on top of your accounts. However, prioritising cash flow will help you to maintain good standing and financial viability more than putting other methods in place. How much you hold in liquid value you can easily access will help you make the right choices and ensure you aren’t hitting any stumbling blocks regarding your finances, putting you on the back foot.
Financial viability is about ensuring you know exactly where your business stands financially, how to prepare for changes in the industry, how your company can adapt and where all of your money is held. This information will support you going forward and allow you to make the right decisions and changes to support future plans and growth.
“Finding the right career can be overwhelming, especially when considering financial stability. Everyone wants a job that pays well and makes them happy, but how do you find it?”
Three focuses of my blog are Financial Literacy/Money, Career Discussions and General Education. One of the considerations for choosing a career for most people is the salary. The following guest post is entitled, Finding the Career to Make You Financially Stable.
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Finding the right career can be overwhelming, especially when considering financial stability. Everyone wants a job that pays well and makes them happy, but how do you find it? There are many resources available and steps one can take to ensure one finds a financially secure and fulfilling job.
Read below for a breakdown of how to find a career that will give you financial stability.
1. Do Your Research
It is essential to research your options before you make any decisions regarding your career choice. It would help if you started by researching different industries, including learning about the job market in those industries, what skills are needed and what kinds of jobs are available. Knowing your industry can help you decide which career path may be best for you.
Additionally, researching salaries from different companies and positions can help determine which job opportunities may provide you with more financial security. This research will also help you determine your expected salary range for the job you want. If you want to be financially secure, make sure you are looking for employment with a decent salary.
2. Survey Your Chosen Field
Because you want to make sure you’re choosing a job that will provide you with financial security, it is important to talk to people who currently work in the industry or field that you are interested in. This will give you a better idea of what it is like to work in that career and an understanding of the job market, salary expectations, and working conditions.
If you cannot find something good in your field, you can always switch careers and start from the beginning. Many people study new fields and switch careers multiple times in their lives, so be open to change if need be. For one, you may want to consider pursuing a new career in the following fields:
a. Political Science.
A degree in BA PolSci provides students with the skills, knowledge, and versatility to pursue many different career paths. This will also let you expand your job search and provide you with more options.
b. Technology
The technology field is constantly changing and expanding, so new job opportunities are always available. Learning the latest technologies and making sure you stay up-to-date with trends in the industry will help you stay ahead of the competition.
c. Law
A law degree can open up many career paths and provide you with the financial security you crave. Lawyers have a variety of jobs to choose from and can expect high salaries depending on the type of law they practice. For example, you can find lawyers with expertise in litigation, criminal law, corporate law, tax law, intellectual property, labor, commercial, administrative, and family law, among others. You can also find lawyers like Carolyn Dubay, with expertise in constitutional law and international arbitration. As mentioned, your expected salary will be based on the type of law you practice. However, a legal degree can generally give you a solid financial standing.
d. Accounting and Finance
These two fields are extremely lucrative and provide job security. With accounting, you’ll learn how to manage money and help businesses keep track of their finances, while with finance, you’ll learn how to invest and manage wealth.
3. Networking with Professionals
Networking with professionals in your chosen field can help you learn more about the industry and meet potential mentors who can provide guidance. Attending career fairs, joining professional organizations, and reaching out to potential mentors on LinkedIn are all great ways to get your foot in the door.
Try to make as many connections as possible and build relationships that can help you in your job search. You can get advice on salary expectations, job opportunities, and career paths. Some of the most successful people have built their careers through networking, so don’t be afraid to reach out.
4. Create an Action Plan
Once you have done your research, it’s time to create a plan of action for yourself. This should include setting achievable goals for yourself, such as completing certifications or classes related to your desired field or reaching out to certain contacts within your network, as well as specific deadlines for achieving these goals. Having an action plan will allow you to stay focused on achieving your goal of financial stability while still allowing room for growth along the way.
Achieving financial stability through finding the right career is possible if done properly with adequate research and planning. Taking the time to research various industries and talking with professionals in those fields can help give insight into which career path may be best for achieving this goal. Additionally, creating an action plan with achievable goals, such as obtaining certifications or classes related to that field, will help keep one focused on becoming financially stable while allowing room for growth along the way! With determination and hard work, anyone can find the path toward financial security by finding their ideal career!
A key focus of my blog is Financial Literacy/Money. Money is not an area everyone wins in. In fact quite a few people struggle with it. In some instances it may be wise to consult an expert. The following contributed post is entitled, Signs You Need A Financial Advisor.
Managing money can be difficult depending on what point you are in your life journey. There are times when you may just not be able to get ahead and manage your money in the way that you would like. Instead of staying confused it is a good idea to hire a financial advisor.
A lot of people think you have to be very rich to need the help of a financial advisor but this is not necessarily true. Financial advisors are there to advise people no matter what stage of the financial journey they are in. Here are some of the major signs that you need to hire a financial advisor.
A Life Change
The best time to get a financial advisor is when you anticipate that there will be some kind of big life change. You may need advice if you are about to have a new baby or a wedding.
It is a good idea to discuss with a financial advisor about how best you can cushion your finances from these events, since they require a lot of spending.
Managing a Windfall
Sometimes life has unexpected surprises. You may find yourself coming into a lot of money through a windfall that you never expected.
For example, an investment that you made several years ago may start raking in a lot of capital or you may inherit money or property from a relative.
It is important that you take the time to look carefully at your finances and see how best you can save and expand your wealth.
You are Worried about Your Finances
Perhaps the biggest reason for you to seek the help of a financial advisor if you are worried about your finances. Fear of financial failure is one of the key reasons most people need the kind of professional and unbiased advice a financial advisor such as Monty Cerf has to offer.
If you are worried about your finances because you have a lot of wealth and you’re afraid of losing it, an advisor can help. If you have very little money and want to build your wealth portfolio your financial advisor can assist you.
No matter what the situation, it is important that you understand where you are in the journey and take strides towards financial growth.
Get the Help You Need
It is important that you manage your finances as best as possible. Failure to manage finances can be detrimental to your future and this is the last thing you want especially if you have a family to take care of.
It is important that you take the time to get the help you need when you need it. Do not wait until you are in deep financial trouble before seeking the help of a financial advisor. As soon as you notice that there is an issue, get professional help.
The money you invest in a financial advisor is well worth it to secure your financial future.
A key focus of my blog is Financial Literacy/Money. As a young person, you have your whole life ahead of you and opportunities more seasoned individuals done have. As such you want to start making smart decisions early. The following contributed post is entitled, Financial Tips for Young People Starting Out In The World.
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It’s a jungle out there. When you’re starting out in the world, everyone is telling you different things about how to manage your money. Do you save? Invest? Spend frivolously and enjoy your youth? It can be hard to know what to do when you’re just getting started. The following blog will provide some tips for young people to help them get their finances on track and make the most of their money!
One of the best things you can do for your future self is to start saving money early on. It may seem like you don’t have much to put away, but every little bit helps. You can start small by setting up a savings account and contributing a fixed amount each month. As you get older and your income increases, you can increase the amount that you save.
Saving early on will help you in two ways. First, it will give you a cushion to fall back on in an emergency. Second, it will help you reach your financial goals sooner. For example, if you want to buy a house or retire at a certain age, starting to save early will make those goals more achievable.
So, if you’re just starting out, make sure to start putting some money away each month. Your future self will thank you!
2) Invest Your Money
Investing your money is another great way to secure your financial future. When you invest, you’re essentially putting your money into something that has the potential to grow over time. This can be done in several ways, such as buying stocks, cryptocurrencies, mutual funds, or real estate. So go now and start working towards financial freedom.
Investing has several benefits. First, it can help you reach your financial goals sooner. For example, if you’re looking to retire at a certain age, investing can help you get there quicker. Second, it can provide you with extra income in retirement. And third, it can act as a hedge against inflation.
So, if you’re looking to secure your financial future, investing is a great option. Just make sure to do your research and invest in something that you’re comfortable with.
3) Live Below Your Means
One of the best pieces of financial advice is to live below your means. What this means is spending less money than you earn. This can be a difficult task, especially when you’re young and just starting out. But it’s essential to resist the urge to spend everything that you make.
Living below your means has several benefits. First, it will help you save money more quickly. Second, it will allow you to weather economic downturns more easily. And third, it will reduce the amount of debt that you have.
So, if you want to get your finances on track, make sure to start living below your means. It may not be easy at first, but it will pay off in the long run.
In conclusion, these are just a few financial tips for young people that are starting out in the world. If you follow these tips, you’ll be on your way to a bright financial future! Just remember to start saving early, invest your money, and live below your means.
Two focuses of my blog are Financial Literacy/Money. One of the keys to winning with money is protecting your financial future. To do so, you must take several methodical and timely steps. The following contributed post is entitled, Protecting Your Financial Future – Debts, Habits and More.
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We know that taking care of our health and wellness is one of the most important things we can do to live a long and happy life. But alongside taking care of ourselves and our families with nutritious food and an active lifestyle, we need to take care of our finances.
Our finances have highs and lows throughout our lives, and sometimes it can get a bit worrisome.
Tackling your wayward finances and taking control of your financial future might feel and sometimes look scary – but with these few tips, there are plenty of ways that you can kick your finances into touch.
One of the most important things to think about when you go through your finances is that not everyone has the same amount of cash. So, you can choose the ones that will make an impact on you and those that make sense to your own financials.
The basics of your cash will give you the information you need to make positive changes. IT is a good idea to create a spreadsheet or something where you can make notes.
Income
Where is your money coming from? Look at your income, passive income, benefits, and any other income that you get.
Make a note of all the individual places and amounts, then a total. Go back over a few months of your income records so that you can work out an average.
Outgoing
Most of us spend more money than we need to, or that we ever recognize. Look at all of the subscriptions you have. Do you get takeout a little more often than you should? Where do you spend money that you could trim?
Make a note of all of the outgoings you have. Just like the income, it is essential to get a more comprehensive overview – so go through 6 months of spending.
Create a calendar
Often the missing part of the process is knowing when things are going in and when things are coming out. Many of us let our automatic payments come and go without paying attention to anything more than the total. You can ask to move some payment dates around that allow you to have an easier cash flow.
Reworking your current attitude
No matter how you want to tackle your finances now, you could probably benefit from some reframing. Since you have a good overview of your finances now, it is time to align your outgoing and your income.
Budget/cash flow
If you notice that things get a bit tight by the third week of the month, or you end up in overdraft and using credit cards – it’s time to check the cash flow. Your cash flow is the timing of when money is coming in and when it is going out.
Date changes
If all of your bills go out and leave you struggling in the second week of the month, it is a good idea to talk to all of the companies and see if you can spread them across the month instead. Align the income and outgoing dates to never leave too far out of pocket.
Month on Month
As you start to make these changes, you need to keep track of how things are going. It will take several months or more to compare and look for a positive difference.
Emergency funds
Many people don’t have an emergency fund because most people use almost precisely what they have in terms of income on expenses. Build significant emergency funds with small, consistent changes.
Why do you need an emergency fund?
When broken washing machines, car breakdowns, and other big things happen, it is easy to turn to hire purchase and short-term loans to replace and repair what you need. But most of the time, this will cause further financial issues at a later date.
Emergency savings are a little nest egg that can help you to avoid needing to take out loans. One of the easiest ways to do this is to opt for an automated savings program.
With automated savings, an algorithm will automatically calculate how much you can save and put it aside for you—taking the work out of saving and overtime building an emergency fund.
Here are some apps that make saving automatic and easy:
● Acorns ● Digit ● Empower Finance ● Chime ● Keep The Change ● Mint ● Qapital
Make sure that you read the T&Cs to find an automatic savings app that works for you.
What should and what shouldn’t constitute an emergency when it comes to spending the fund? These guidelines can help stop you from dipping into the fund when you ‘want’ something, not ‘need’ something.
And, every time that you need to use some of it make sure that you keep saving and adding to it afterward.
Bonus cash
Any time you have extra, split it between your savings and your regular account. Getting into the habit of seeing extra cash as a nest egg rather than fun cash can make it easier to enjoy saving.
Debts and insurance
There are two things that, no matter what, need to be paid. Debts need to be paid down, and insurance needs to be paid up. Debts are often scary because they stack up quickly – often come with high repayments, and after a default or two, you might end up in a lot of trouble.
Insurance
You need to have insurance that covers everything, from your home and content to family and auto. Your insurance is much like your emergency funds, it might seem like an expense, but it is one worth the time. Find a full-service insurance agency, so you get everything you want.
Debts
Often when people have debts rather than look at the total amount owed, it can be easier to hide and just pay small regular results. Look at where you owe money across the board, and make a note of the totals. Look at what you are paying off, how much of it is interest, and how much is paying down the initial debt. Often monthly payments are made up of more interest than paying it down.
Once you have your total, look at how much you are paying against the total, and then you will know how long it will take to pay off.
There are a lot of different debt reduction strategies that you can use, so it is important you find one that works for you and that is realistic. The snowball method is the one that most people have success with.
You can also get in contact with all of your creditors and renegotiate your payment terms. In many cases, they will be happy to reduce your monthly payments if you need to. It is also important to look at the options you have for paying off student loans.
Money Habits
Creating good money habits isn’t something that just happens. Unless your parents or guardians teach you good money habits – they can be hard to learn. Making a few financial mistakes is something that happens to many people, but it doesn’t have to be the whole story.
Create some healthy money habits that help you keep building on your success.
Credit
Before you apply for anything, ask yourself do you need the credit, or could you wait? Having a few small lines of credit (that are kept in good standing) can help you keep a good credit score.
Credit report
Your credit report will tell you your score, and it will also tell you where you can make some improvements. If there are any mistakes on it, you can have those rectified and clean up your score. Some credit score companies can also highlight how you can improve your score.
Ahead of trouble
If you run into trouble, like you need to have some time off work or your work situation changes, then it is in your best interest to get in touch directly with your creditors to freeze the payments. Missing a bill will give you double or more to pay and with fines and charges on top.
The call might feel overwhelming, but once it is done, you will feel better in the end.
Short vs. Long
Short-term loans and payday loans are designed to keep people in a spiral of taking and paying loans. Long-term loans are much nicer in terms of APR%, but they also tie you into long repayments.
Try where possible to avoid short-term loans and anything payday when you are trying to get your debt and money management under control.
Part of building good money habits is learning how to make your money go further. Making your money go further can help with your saving goals, increase your proactive approach, and more. Here are some extra tips for you: Tips To Make Your Money Go Further.
Once you have the basics and face your finances head-on, you might be surprised just how comfortable you get with your cash and just how quickly you see positive results.
A key focus of my blog is Financial Literacy/Money. Many people don’t respect it’s importance, but Financial Literacy can be the difference between a good quality of life, or a life of struggle. The following guest post is entitled, The Importance of Financial Literacy and How It Affects Your Life.
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It’s not easy to learn how to manage your money properly. However, if you want to become wealthy in the future, you need to know the importance of financial management and begin integrating techniques into your daily lifestyle.
There’s a huge difference between earning a huge amount and being rich. Some people may make a decent amount of money every month but not manage their earnings very well. As a result, they tend to spend their money on wasteful expenses or useless purposes. They develop a habit of earning and letting the money go without saving or investing some of it.
Meanwhile, wealthy people often have peace of mind knowing they can live comfortably. They can finance their expenses for the following months, and they have a stable income to rely on. Often, these are the people with multiple investments and savings in the bank.
Learning financial management involves developing practices and habits that will help you accumulate security and wealth in the long run. Integrating financial management also considers your personal goals, needs, and risks as you focus on making wise financial decisions. The practice also encourages you to look back on your old habits that may block your success. Further, it can also involve a humble awareness about specific elements that you can no longer control, such as taxes, inflation, market volatility, and debt.
Basic Financial Literacy
Not understanding the principles of using money can lead to several issues. For instance, if you don’t know the relationship between credit and interest, you might end up swiping your credit card for a small amount that may cost you 20% more of the total amount. The truth is that many people are paying a specific thing repeatedly, basically wasting their money.
When this happens, you could end up with a poor credit score. Credit scoring solutions can identify individuals with poor financial management practices, which could be why you will not get approved for house or car loans in the future.
Without the proper knowledge and understanding about financial matters, you will most likely end up like most people-paying high fees, uncertain about where they have spent their money, and paying debts for so many years.
Here are some financial management tips to get you started.
1. Track Your Money
Many young individuals are not even aware of where they have spent their money. If this is the case, there is certainly room for improvement to eliminate the bad habits.
Financial management always begins with spending awareness. List down your monthly expenses or use a management app to track where your money goes. Doing so will help you identify if you are spending too much on unimportant things. Once you’re aware of your spending habits, you can make a plan to improve.
2. Create a Budget
Compute your estimated income and how much you spend every month to create a realistic budget. You don’t have to implement drastic changes right away; you will only deprive yourself of what you usually enjoy, like eating out or shopping for clothes.
Instead, create a budget that aligns with your lifestyle. Over time, you will embrace the small changes that will enable you to develop healthy spending habits.
3. Save
Saving is an essential factor in proper financial management. It gives you financial security and protects you from uncertainties that may cost you money. Save as much as you can, do it little by little until you can finally put more money into your savings account.
4. Pay Your Bills
Your bills should always be on top of your budget. Always prioritize your payment for electricity, credit cards, rent, and other vital expenses to ensure that you allot money for them before anything else. In addition, ensure to pay your bills on time as that may also affect your credit score.
5. Check Your Subscriptions
Many of us tend to subscribe to platforms and automate payments through credit cards. However, it would be wiser to check if you are actually using these subscriptions. Otherwise, you’re wasting money. Review your credit card bills regularly and see if there are some subscriptions you no longer need.
6. Learn to Invest
Like saving, investing is another crucial part of financial management. Learning how to invest your money where it will grow ensures that your money is working for you, giving you more income and higher savings in the long run. Investing is also a great way to ensure that you have funds when you retire.
Knowing how to manage your money is an opportunity to obtain financial freedom. Through your financial skills, you can manage your money well without sacrificing the lifestyle you want while you save, invest, manage your cash flow and secure a bright future for yourself and your family.
A key focus of my blog is Financial Literacy/Money. Succeeding with money usually comes down to a few simple adjustments/tips. Once you figure out what they are, you must then execute them. The following contributed is entitled, Reach Financial Stability With These Top Tips.
According to a recent study from the ABA Banking Journal, only 29% of Americans are financially healthy. Furthermore, with the full financial impact of the COVID-19 pandemic yet to reveal itself, these figures may plummet even further.
However, while certain aspects of our finances remain beyond our control – there are certain steps you can take to improve your financial situation and work towards becoming financially stable. Here are some great examples to get you started!
● By now, it’s beyond clear that there is power in budgeting your money. This is because it helps you reign in any negative spending habits you might have acquired (such as online shopping). Furthermore, without budgeting, it’s near impossible to figure out exactly how much you are actually spending each month. If you’ve never budgeted before, you might want to try the 50:30:20 rule.
● If you find it hard to stick to a certain budget, you might want to check out some of the best budgeting apps that you can download onto your phone. They will send out daily/weekly notifications that help you to better monitor and control your spending.
● If you’re in urgent need of money, consider taking out a small loan to support yourself until you are in a better situation. For example, many Americans take out small loans to cover their monthly expenses when waiting to be paid for work. In this case, you must work with a reputable company you can trust, such as cash train. You should also ensure that you factor this repayment into your monthly expenses.
● If you have a little bit of money set aside each month, you might also want to consider investing. When done correctly, this is a great way to boost your finances significantly. However, it’s important to remember that investing is not a guaranteed way to earn money, meaning that you should not invest more than you can lose. If you haven’t invested before, you should check out these useful investment tips. With the likes of Energy Innovation Capital and similar professionals, getting these tips shouldn’t be difficult.
● While you must know the difference between cheap and frugal, you should also ensure that you find as many ways as possible to live frugally. For example, you can begin to grow your own fruits and vegetables instead of buying them from supermarkets that often overcharge for goods. Alternatively, you could buy these products from smaller, local businesses for a much fairer price.
● If you want to get serious about saving money, you need to set up a savings account and send a set amount of money into it each month. This way, you are less likely to spend it accidentally – especially if it’s an account that you can only withdraw money from a few times a year. Furthermore, many savings accounts offer interest on their accounts, which is a great way to earn passive income!
A key focus of my blog is Financial Literacy/Money. Unless you are a big-time athlete, an entertainer, or you’ve designed the next greatest innovation, money is a long game. As such you have plan accordingly. The following contributed post is entitled, Strengthen Your Financial Position In The Long-Term.
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Are you looking for ways to improve your financial situation? If so, then there are a few different steps that you can think about exploring. Here are some recommendations that you need to keep in mind. This will help ensure that you have a fantastic quality of life, long into your later years.
First, you should consider using a financial planner. The benefit of a financial planner is that they provide a personalized service that will be based entirely around your individual situations. This means that they will find investments that are relevant to your current financial portfolio as well as your goals. Indeed, the point of a financial planner is to help you find the right paths to achieve your financial goals. For instance, you might have an age at which you are hoping to retire. A financial planner can formulate a plan that will allow you to achieve this. You can click here to see more about what this could mean for you.
Diversify Your Incomes
It could also be worth thinking about diversifying your income. If you diversify your income, then you can make sure that if one income fails, you have others to fall back on. There are countless income possibilities that could be worth exploring. For instance, you might want to take a look at the DeF industry. Once you have completed a little research, you’ll find that there are interesting side hustle possibilities here.
Go Big With Investments
Once you start saving money, you should immediately begin to look at investment opportunities. You can start with small options on the market but you should then grow your options further. Bigger investments may come with greater levels of risk. But they also provide the potential of far greater returns. So, instead of investing in one home, you should consider looking at a shared property instead such as an apartment building or block of offices. If you don’t have the money to explore these investment choices, then we recommend that you look at forming a partnership or a team of people with similar financial portfolios to you.
Prepare For For The Unexpected
Finally, with your finances, you need to make sure that you are ready for anything. You must try and prepare for situations that you hope would never happen but that could potentially cripple you financially in the future.
There are numerous examples like this. For instance, you could develop a long-term injury. Research suggests that by the time you are 65, it’s more likely than not that you will have some form of disability that negatively impacts your quality of life. One of the ways that you can prepare for this would be with disability insurance. The right disability insurance coverage will protect you in the long term.
We hope this helps you understand some of the ways that you can strengthen your financial position and ensure that you are better prepared for the challenges that you could face on in the future.
A key focus of my blog is Financial Literacy/Money. Our overall financial health come down to a number of factors but decision making plays a major role. This is true for all ethnic groups. The following guest post is entitled, 5 Mistakes That Can Lead Young Filipinos to a Financial Nightmare.
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Today, more and more young Filipinos are paying attention to their finances thanks to the increasing accessibility to financial tools and knowledge sources, something that their parents and grandparents were not lucky enough to have. However, there are still a lot of youngsters in the country that are committing the same mistakes that their predecessors did, as well as some new ones that came with modern technology.
Here are some of the most common ones, and how Filipinos, both old and young, can avoid them:
1. Taking out unnecessary loans
Whether it’s because of “petsa de peligro”, an expensive gadget, or an unexpected expense, many young Filipinos turn to payday loans to make ends meet before the next paycheck. While these types of loans may provide quick and easy cash, they also come with exorbitant interest rates that make borrowers pay more than half of the original amount. The result? Blown up debt that can make one’s finances even harder to manage.
The best way to avoid this problem is by establishing an emergency fund and practicing delayed gratification. With an emergency fund, one can pay for unexpected expenses without draining their main bank accounts and resorting to loans. And by practicing delayed gratification, one’s ‘wants’ won’t be a good enough reason to take out a high-interest loan.
2. Waiting too long to take out insurance
When it comes to insurance, many Filipinos display the “I don’t need it yet, I’m young and healthy” attitude, mostly because they don’t want to lose part of their income to something intangible or something that won’t immediately benefit them. However, no one knows when sickness, accident, or death can befall someone; health or life insurance plans and other types of coverage help protect the insured and their family in case something were to happen.
Moreover, insurance premiums increase with age. By waiting too long to take out insurance, young Filipinos are missing out on lower payments while they are still considered low-risk.
3. Spending too much on online shopping
With the massive popularity of online shopping platforms like Lazada and Shopee, it’s no wonder why so many Filipinos–both young and old–are finding themselves spending too much on their online purchases. Even with the frequent promotional ‘sales’ that these platforms offer, money spent is still money spent, no matter how big the discount is.
And that’s exactly the problem, too many online shoppers are blinded by sales, hefty discounts, and free shipping promos that they often buy things that they don’t even need. There’s nothing wrong with shopping online. In fact, it’s a safe and convenient way of shopping amidst the COVID-19 pandemic. However, it may be causing shoppers to spend more money than necessary, and sometimes, money that they don’t even have.
4. Not planning for retirement
For the older generations, especially Filipinos, their children are their retirement plans. It’s a common tradition in the country to “give back” to one’s parents upon entering the workforce, and going against the grain is often seen as taboo or being ‘ungrateful’. Needless to say, this is a toxic belief that is putting too much pressure on young Filipinos and leaving them unable to prepare for their retirement at the same time. As a result, these young Filipinos will also depend on their children for their needs in the future, hence, a generational financial curse.
That said, it’s crucial for Filipino millennials and Gen Zs to break this cycle by planning for their retirement. This could mean taking out long-term investing plans, making contributions to pension plans, and building their nest egg as early as now. Contrary to popular belief, it’s never too early to start planning for retirement–even if it’s forty or fifty years away.
5. Succumbing to lifestyle inflation
Lifestyle inflation is a problem not exclusive to Filipinos, but it certainly is a common issue in the country, especially with a culture that makes people believe that when they move up in life, they should have something to show for it. For many Filipinos, this means buying a bigger house, taking out the latest car model, buying more expensive clothes, or going to high-end sources of entertainment when they start earning more money.
Lifestyle inflation, to a certain extent, is acceptable. However, when the expenses start equating to income, you’re probably spending too much and may be well on your way to debt.
These are just some of the financial mistakes that a lot of young Filipinos are guilty of, but are definitely some of the worst ones. If you’re still committing one or more of these mistakes, it’s high time to start taking more control of your finances for a brighter financial future.
A key focus of my blog is Financial Literacy/Money. Most of us will experience a major negative financial event at some point in our lives. The key though is preparing for the recovery, and then recovering. The following contributed post is entitled, Recovering Financially From A Unique Set Of Circumstances.
The vast majority of people are conditioned to react to the word “debt” as though it’s a toxic, inextricable state of affairs. For sure, none of us wants to be subject to a financial burden that pushes down on us for an extended period, but it is worth developing a more sophisticated understanding of how debt works. Not only in terms of how it can be maintained safely, but also how it can sometimes be simply inevitable.
Let’s take the current situation as an example. Although different areas have opened up after the initial pandemic lockdown, to a greater or lesser extent, we are far from a “normal” situation. People have lost out on paydays, which means they have had less money to spend. This means that businesses have seen their takings reduced, and some businesses will not survive. Which means that other people lose out on paydays. Sound financial management – which is always worth practising – will not, on its own, prevent a lot of us from serious debt burdens.
So what do we do about this?
Usually, when negative circumstances arise, the smart advice is to tighten one’s belt and look for alternative income streams until it all blows over. As second waves of the pandemic develop in those countries fortunate enough to have managed the first wave, no-one knows when this will all “blow over”, but you wouldn’t bet on it being this side of 2021. That’s a long time to be in a financial holding pattern.
It is hoped, broadly, that some top-down plans will arrive at some stage to assist those of us worst affected, but again, it’s a waiting game. For some of us, the best bet may be to go on the offensive: looking for payment holidays from creditors; finding out about refunds we may be entitled to; reading a DTSS U.S. review or two to see where you might benefit from getting more proactive.
Working on future financial independence
Perhaps the most important element of recovering from this unforeseen public health crisis is being ready for it to happen again. This is a set of circumstances to which most of us have never been exposed, and it’s reasonable to imagine it wouldn’t happen again in our lifetimes. We shouldn’t count on that being the case – recent history shows us things can always get worse. So being ready to not rely on a single income stream is essential. Diversifying your revenue is a priority.
Right now, it may be tricky to find a way to ensure continued income; as we’ve said, all but the richest are experiencing anxious times right now. However, now is the time to think about how we can build back from this, work out how and where to invest money so that – if this all happens again sooner than expected – we can be confident that there will still be money arriving in our accounts every month. It may seem like a pessimistic way to look at things, but we’ll be grateful for some level of preparedness if we have to weather another storm.
